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New York Times Blogs - Duff Capital Advisors has recently laid off dozens of its employees and is holding off on its plans to raise as much as $1.5 billion just eight months after the hedge fund firm began business, according to people briefed on the actions.
The Greenwich, Conn.-based firm was started in March by Philip N. Duff, a former chief financial officer of Morgan Stanley, with $500 million of capital from the New York private equity firm Lindsay Goldberg. At the time, Duff Capital said then that it was in discussions with several financial institutions to provide seed money for its investment strategies, beginning in the past spring.
While the firm is still in discussions with clients and some potential investors, it has failed to find any new capital so far.
Norwalk Advocate - Some hedge funds are reducing their management and incentive fees to keep investors for longer periods during turbulent times on Wall Street.
Typically, hedge fund managers require investors to lock their money into a hedge fund for a year while charging a 2 percent management fee and keeping 20 percent of hedge-fund profits as an incentive fee - if it reaches a pre-determined point.
Camels Capital LLC, a Greenwich-based hedge fund, and Ore Hill, a New York-based fund, among others, have restructured these terms to keep investors.
"Ourselves, Ore Hill and a few other funds have taken a step to do that in this period of liquidity to lock in investors," said Richard Brendan, chief executive officer for Camels Capital. "We’ve been able to lock in our investors for a period of time to participate in opportunities with them."
Brennan would not comment on the specifics of the agreement between the hedge fund and his investors.
Scott Baker, a principal with Greenwich-based hedge fund investment firm Cookpine Capital, said many hedge funds are coming up with innovative ways to secure investor capital for longer periods.
New York Post - The heat is getting turned up under Alan and Philip Milton, the brother team that runs Greenwich-based Windmill Management and its embattled SageCrest hedge funds.
A lawyer for an investor in the SageCrest II hedge fund is threatening to fight the Miltons’ Chapter 11 filing for the $500 million fund - claiming the duo made the court filing last Sunday night, in part, to head off the possible appointment of a forensic accountant to probe the fund’s books.
WoodCreek Capital, was due in court Aug. 18, the day after the Miltons filed to liquidate their funds, to seek a pre-emptive lien on some of SageCrest assets and access to inspect their books.
WoodCreek had filed a $5.8 million lawsuit against the Miltons’ fund claiming the duo had reneged on a promise to honor their withdrawal from the fund.
Stamford Advocate - A Greenwich hedge fund company is among hundreds of the risky investment entities that have closed or are projected to close this year amid volatile equity and commodity markets.
Turnberry Capital Management told investors last week that it will liquidate its fund and close its doors after most of the clients sought to withdraw their money, Reuters reported. The fund, which invests in distressed debt, once managed about $800 million.
"We intend to take a series of steps to liquidate the Fund and redeem all Fund investors at the same pace," fund manager Jeff Dobbs wrote in a letter to clients that Reuters obtained. "After Labor Day, we will commence a sell-down of the Fund’s security holdings in order to raise cash to fund redemptions."
New York (HedgeCo.Net) - Greenwich-based Andor Capital Management will liquidate its $2 billion hedge fund after posting losses due to unfavorable market conditions, following in the footsteps of many failed hedge funds this year.
Co-founder Daniel Benton announced the decision in a letter to investors this week while outlining a liquidation to start in October.
"My desire to devote more time to my family and other interests runs counter to the obligations of a hedge-fund manager who must be immersed in the markets in order to meet client expectations," Benton said in the letter. He also stated that he will be retiring from managing outside capital after 24 years in the business.
In 2004, Andor made headlines when Benton split from Co-Founder Christopher James. At that time, Andor held over $6 billion in assets and was just starting to experience turbulence after a period of enviable returns.
Benton, having been a technology investor at Pequot, built up high stakes in energy and commodities companies. However, the volatility associated with these companies has not translated well for many hedge funds invested in those sectors.
The hedge fund will continue to invest throughout August and September.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Newsday- A 23-year-old man convicted of running a hedge fund scam in Connecticut has filed a federal lawsuit against New York University, claiming the school owes him a diploma.
Hakan Yalincak, an NYU undergraduate, was sentenced last year to 3 1/2 years in prison for persuading investors to pour millions into a nonexistent Greenwich-based hedge fund.
A $21 million gift that Yalincak had promised to New York University proved to be an a fraud. The $1.25 million first payment turned out to be illegal proceeds from the hedge fund scam.
He was also ordered to pay restitution of $4.18 million.
Hartford Courant- An investor has sued a Greenwich hedge fund management firm, accusing its operators of siphoning off money and enriching themselves at the expense of investors.
Westerly Capital sued Windmill Management LLC, manager of SageCrest hedge fund, and operators Alan and Philip Milton and Richard Weyand in Stamford Superior Court earlier this month.
It is demanding an accounting of money that has been lost and accuses the operators of Windmill of overvaluing fund assets "in furtherance of a scheme and/or course of conduct designed to personally enrich themselves even if this proved detrimental to the fund and its investors."
West Palm Beach (Hedgeco.net)- The Greenwich Global Hedge Fund Index(GGHFI)reported May returns of +2.01% while the Greenwich Composite Investable Index returned +1.66%. The May Index currently includes 1345 constituent funds.
By comparison, the S&P 500 showed gains of +1.29%, while MSCI World Equity and FTSE 100 indices posted returns of +1.11% and -0.56%.
"Across the board, hedge funds performed well in May. But the real story is told when comparing year-to-date performance," notes Margaret Gilbert, Managing Director. "Hedge funds are positive for the year compared to the major equity indices which still remain negative."
For the second month in a row, Long/Short Equity managers were the best performing strategy group, posting a gain of +2.35%. Directional Trading managers, the best performing strategy group so far this year, exhibited another strong month, returning +2.00%.
Specialty Strategy managers were the second-best performing strategy group, returning +2.10% on average. The Market Neutral Group averaged +1.39% on the month as Event Driven managers continued to find opportunities in uncertain markets.
The Advocate - A Greenwich hedge fund has become ensnared in a legal dispute with one of its investors after refusing to allow the firm to withdraw the $5 million originally invested in the fund.
SageCrest LLC, a Greenwich hedge fund that at one point controlled about $990 million in assets, has been sued by Wood Creek Capital Management, a New Haven-based hedge fund that for more than a year has been seeking to redeem the $5 million it invested in SageCrest.
In a court documents filed in state Superior Court in Stamford last week, Wood Creek officials claimed SageCrest, which is managed by Windmill Management LLC, also of Greenwich, rescinded on agreement to return the $5 million to the New Haven firm, which was requested after the Greenwich firm started posting unsatisfactory returns last year.
In a separate declaratory judgment filed in Delaware courts, the state where SageCrest was organized, the Greenwich hedge fund claimed its original contract with Wood Creek gave them the right to refuse any redemption requests if "the redemption would have an adverse effect" on the fund.
SageCrest "needed to gate the fund," said Bill Brewer, an attorney for the Greenwich fund and a partner at Bickel & Brewer, a law firm with offices in New York and Dallas.
Hedge funds typically throw up their "gates" as a way to preserve liquidity in adverse market conditions.
Times Online- This week, some of the City’s wealthiest people will descend on a lavish party in London intent on giving away a large chunk of their personal fortunes.
More than 1,100 will pile into the Absolute Return for Kids (Ark) annual dinner at the Royal Naval College in Greenwich, including many leading members of the new City establishment from the hedge fund world.
Some will be flush with cash, despite the downturn and the credit crunch. Others will be feeling the pinch. At last year’s event, this group of modern-day philanthropists — with its smattering of Hollywood superstars and A-list celebrities — gave away an average of £26,000 each and raised a combined £26.6 million.